Sunday, August 24, 2008

Omanisation of Wadi Kabir?

I read with some dismay the recent decision to ban further employment visas for key professions here in the Sultanate. Before I get onto that though, let's rewind a little bit and examine how well some of the other recent Omanization laws have worked out.

1) All Omani Tow Trucks: The end result has been very good for the bottom line at AAA, and perilous for the consumer. Given that my cars are all rolling hunks of crap, I utilize a towing service fifteen times a year or so. An average wait time for a non AAA towe went from two hours to ten for me. Three weeks ago, it took two days to get a truck to Qurum, where the Jeep had broken down.

2) No Expatriates allowed to own Abu Shenab or other Two Door Pickup Trucks: A firesale of Two door pickup trucks, followed by an explosion of four door pickup trucks.

3) Omanisation of fruit and vegitable sellers: In our neighbourhood, this caused the immedaite closure of twelve fresh fruit and vegitable stores within walking distance of my house. A five minute walk to get fresh fruit and veg for dinner has become an hour-long saga at lulu, where shopping for produce is the closest thing Oman has to a full contact sport. This brilliant initiative has turned out to be a total pain in the ass for everyone in my neighbourhood, a catastrophy for the small Omani businessmen who owned and worked at the shops, and real boon for foreign owned mega stores like Carrefour and Lulu.

Read the report from the Times of Oman below.

From the Times of Oman:

Ban on visas for several professionsAnita Joseph Sunday, July 27, 2008The Ministry of Manpower has announced that it has stopped issuing visas to companies engaged in the following activities: Import and export, cleaning, barber shop, laundry, electronic repair, garbage cleaning and selling, textile shops, mobile GSM shops, health clubs, workshops in aluminium, iron, wood, car repair and all related activities, tailoring shops and beauty parlours. As per the new rule, companies engaged in these activities will not be eligible for visa clearance. Accordingly, existing companies cannot bring in new expatriate recruits, nor can new companies be set up. However, those currently employed in these activities can renew their visa.

Ministry sources say the objective of the move is to enhance Omanisation and bring more local talent to the fore. “There is plenty of local talent but there’s very little space available for them,” said an official. Ministry sources also revealed that the visa restrictions apply only to small, grade 3 and 4 companies and not to those that have been awarded the ‘green card’ for compliance with labour laws and Omanisation targets.

(The Bolding and Italics are mine.)

Before I get really vitriolic about this let me say that I am really relived to note that they have decided to implement this by allowing the renewal of visas for workers currently in country, and simply banning new issuance of visa. This appears to be a stroke of genius from a Ministry not usually known for such things.

If correctly implemented, it will serve to gradually inflate the Salaries of mechanics to a level where Omanis would be tempted to take the jobs. It will encourage shop owners to treat thier foreign and skilled local labour well, because in the short term they will be totally irreplaceable. I can forsee a 3-5% reduction in foreign workers in these feilds each year, a rate that I think is sustainable.

It sounds too good to be true, and it is. Because the authourities, in thier wisdom, have decided to exempt big companies (Zubair, Bahwan, OTE etc..) from the mandate. They are welcome to bring in as much foreign labout as they want. A Good, if somewhat optimistic, Omanization plan becomes a subsidy for big business at the cost to hundreds of small Omani Business Owners.

These big companies have the facilities to train literally thousands of Omanis each year. They have the air conditioned service bays, and the Human resource staff and the logistics in place to make an omanisation mission of this sort work. The little Guys in Wadi Kabir have none of these things. They are struggling to compete in a market where even new spare parts are sold acccording to monopoly rules. You want Genuine Chevrolet parts? You can Only go to Chevrolet. * See note at bottom

The giant companies can point to thier entire corporate rolls and say "Look!!! but we already have Omanis working in corporate, sales, marketing, and paperwork positions." Good for you. THe small guys don't have HR, Sales, IT or accounting departments. They have mechanic departments, and that's it. There is really noweher to stick a non mechanic Omani except maybe as a guard or to answer the phone.

Regarding the Story in the Times, and professions other than mechanics; What the fuck is the ministry thinking saying that there is plenty of local talent for these positions? Garbage cleaning? Laundry? Wood Working? I think not.

OK, actually there is plenty of local talent who are qualified to do garbage cleaning, but I seriously doubt you'll find many willing to do it for anything less than RO 600 a month.

And no space? ANY workshop in Wadi Kabir would be delighted to have a hardworking, mechanically minded Omani on staff. Every single Wadi Kabir workshop I frequent asks me if I know any Omanis who are interested in learning the automotive trade. Every time I visit.

This is a foolhardy decision, and one which I think the Ministry will come to regret. It smacks of Wasta and big corporate influence at the expense of hard working Omanis and small business owners. To exempt the big corporations is unforgivibally short sighted.

* One man is trying to break the Monopoly on New Spare parts. Tariq al Kiyumi became so frustrated with being over charged for spare parts by Bahwan Toyota that he started his own Spare parts business in Wadi Kabir.

Toyota won't sell to him directly, because they have an agreement to deal only with Bahwan. So he buys the spares at bulk prices from the toyota dealer in DUbai, and brings them down to Oman to sell at a discount in his shop in Wadi Kabir.

Two years ago, Bahwan opened a toyota spare parts shop next door to Tariq Al Kiyumi spare parts. He's still in business, and is forcing Bahwan to lower thier prices to be able to compete with him. I'd like to see more stories like this in Oman.

12 comments:

I totally agree, and it'd be great to read about Tariq's story. Can he do the same with Land Rover parts? I think I've put a few workers at MHD's kid's through university buying their stupidly over-priced kit.

Tariq story brings to light the other side of the domination of car agents- the dark side. SSB (remember when it was Suhail and Saud Bahwan?) used to enlist the ministry of commerce and the police to do campaigns to stop the sale of illegal car parts. SSB used to claim that these parts were not genuine and represent a risk to the safety of people who buy them. Sadly, the government supported them in this campaign and they shut down many shops that actually sold genuine parts and their only guilt was to try to compete with this giant conglomerate.

With Tariq, they went to unbelievable extremes. When they couldn't him shut him down with their claims that he wasn't selling genuine parts, they went and opened an official parts right next to him hoping to run him out of business. When that didn't work they went to a ridiculous extreme of buying the building which his shop was in just to kick him out, hoping to finally close him down once and for all. He went and bought a tiny building for himself and put his shop in it.

It's incredible that this huge corporation feels threatened by this guy. If they don't get Tariq out of business and make an example out of him, they risk other Tariqs coming into the market. This is not acceptable. Genuine parts must come from the dealer. And if you dare to challenge that, don't ever think that you're too small for them to notice.

Great post. I also vote for a Week article highlighting Tariq. I didn't know about Bahwan actually buying the building he was renting. Wow.

The Ministries seem to not be learning the lesson of unintended consequences. They want to pass simple laws (like the ill fated 15% rent announcement) and don't take account of how people will respond.

Same with the fruit and veggie law - now instead of those shops you loved there are just a load of basically identical house building supply shops instead, because they aren't (yet) mandatory Omanised.

The day I see an Omani cleaning the garbage off the streets I'll be absolutely flabbergasted!

I can't see it happening.

It's quite interesting to note that the biggest companies run by the country's wealthiest men, who have the most resources and are in fact Omani themselves aren't helping their fellow countrymen and women more.

I would like to know the reason for this.

There is absolutely nothing wrong with skilled trades. In other countries you can make a very good living as a carpenter, plumber, mechanic, etc. it's just not the case here.

Maybe that's the problem.

I wouldn't work my ass off and then not even be able to put food on the table for my family either.

Now to buy a loaf of bread which costs 300 baisa, we have to visit a hypermarket, braving traffic on the way and serpentine queues at cash counter...all thanks to Omanisation!

If 'The Week' manages to get Tariq's story on the front cover, Toyota ads will disappear from the back cover. Saud Bahwan bosses are so fussy that they took offence to a report which appeared in local newspaper with the headline "Ship carrying Toyota cars sinks". This happened a couple of years back.

Thanks for all the comments guys, I'll be speaking to Tariq this week and I"ll tell him how impressed everyone is with him.

Sythe, No kidding. Gopi was joking that he should give us a frequent flyer card last week.

Kishor, Maybe the week couldn't really lay the smack down but I do think that they Are the only media in the sultanate with the balls to publish anything like that. Tariq could sure use the publicity.

Muscati, Thanks for the informative comment. I had no idea thay had bought the building out from under him! That's unbelivable, it makes me so angry. I haven't much of Tariq since last Eid.

AIO- You have hit the nail on the head there with why a lot of these Omanisation initiatives are failing.

Omanymous- I'm also Pro Omanisation, but the mechanisims the authourities are using to push it forward are the wrong ones. I have a post in the works regarding how I think Omanisation could best be pushed forward. You will like it, I think.

Thanks every body for the comments and supports and wellcome to any magazin which is bileaving in me and i think i have ahuge stories that i can shows or writes.My office is open and any one can come to see me.The good news that im going to open the 3d branch in Mabila soon.Regards To AllTariq Qme

My father owns & runs medium-sized business with wood, aluminum and car work shops in 3 areas (WK, Ghala, Mabelah). His woodworks (most lucrative) Customers-Available to Customers-Catered ratio is around 5:1. He wants to expand, he can expand, but everytime a labor clearance is applied for, there are 10 Omanis sent to his office the next day, 5 of whom don't show up, 3 are late and out of the 2 who come, 1 wants wednesdays & thursdays off since he lives in quriyat, and the other one has never used a mechanical saw.

Their claim to work? a 3 month course from Khimji's vocational training school. Out of desperation even took one in. He had, if nothing else, the right attitude. Of course, he ran away in the 4th month.

Is this empowering the people? Or forcing them in menial jobs? There are good omanization programs going on, not as cheap or as easy to implement, but what would the next generation rather see; father of 80% children to be carpenters/barbers/drivers? or pilots, executives, bank officers?